SCCD: N.A..

AFRICAN DEVELOPMENT BANK

TUNISIA

SIDI EL BARRAK DAM CONSTRUCTION PROJECT

PROJECT COMPLETION REPORT COUNTRY DEPARTMENT NORTH REGION NOVEMBER 2002

SCCD: N.A..

TABLE OF CONTENTS

Pages List of Tables …………………………………………………………………….. List of Annexes ……………………………………………………………………... Currency and Measures ……………………………………………………………... Acronyms and Abbreviations ………………………………………………………… Basic Project Data ……………………………………………………………. Executive Summary …………….…………………………………………………… Project Matrix ………………………………………………………………………

ii ii iii iv v x xii

1. INTRODUCTION …………………………………………………………….

1

2. PROJECT OBJECTIVE AND FORMULATION……..………………….

2.1 Project Goal …………………………………..…………………. 2.2 Project Description …………………………………………………. 2.3 Project Formulation ………………………………………………… 2.4 Preparation, Appraisal, Negotiation and Approval ………………...

1 1 1 2 2

3. PROJECT IMPLEMENTATION ………………………………………..

3.1 Effectiveness and Start-up ……………………. 3.2 Procurement ………………………………………………... 3.3 Modifications ………………………………………………………….3.4 Implementation Schedule………. 3.5 Reporting……………………………………………………………….3.6 Financing Sources and Disbursements ...…………………………..

2 2 3 4 4 5 5

4. PROJECT PERFORMANCE ………………..……………………………..

4.1 Overall Assessment ………………………………………………. 4.2 Operational Performance ……………………………………………. 4.3 Institutional Performance ………………………………………….. 4.4 Management and Organizational Effectiveness ……………………… 4.5 Staff Recruitment, Training and Development ………... 4.6 Performance of the Consultants, Contractors, Suppliers and

Borrower………………….. 4.7 Financial Performance ………………………………………………..4.8 Economic Performance ……………………………………………..

7 7 8 8 8 9 9 10 11

5. SOCIAL AND ENVIRONMENTAL IMPACT OF THE PROJECT ……….

12

6. PROJECT SUSTAINABILITY ……………………………………………..

14

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7. PERFORMANCE OF THE BANK, THE BORROWER AND OTHER DONORS ………………………………..

7.1 Performance of the Bank …………………………………………. 7.2 Performance of the Borrower ………………………………………… 7.3 Performance of the Executing Agency ……………………………… 7.4 Performance of Other Donors ……………………………

14 14 15 16 16

8. OVERALL PERFORMANCE AND ASSESSMENT……………………

16

9. CONCLUSION, LESSONS LEARNT, AND RECOMMENDATIONS ..

9.1 Conclusions ……………………………………………………………9.2 Lessons Learnt ………………………………………………………...9.3 Recommendations ……………………………………………………..

16 16 17 18

LIST OF TABLES

Table 3.1 Projected and actual implementation schedule Table 3.2 Comparative table of project costs by component Table 3.3 Comparative project costs by financing sources Table 3.4 Comparative table of expenditure schedule

LIST OF ANNEXES

Annex 1 Map of the location Annex 2 Implementation Performance of ADB-financed components Annex 3 Estimated and actual costs/ estimated and actual financing Annex 4 Annual disbursements : ADB funds and overall project Annex 5 Calculation of the economic and financial rate of return of the project Annex 6 Performance evaluation and rating Annex 7 Matrix of recommendations and follow up measures Annex 8 Sources of information Annex 9 Observations of the borrower and of the executing agency Annex 10 General financial and technical data

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CURRENCY AND MEASURES Currency unit : Tunisian Dinar (TD)

At Appraisal (June 1992)

At PCR (October 2002)

1 UA TD 1.3775 TD 1.8390

Trend of the annual average exchange rate

Year 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 TD/UA 1.3775 1.3775 1.3990 1.4157 1.5363 1.5176 1.6464 1.8390 1.8390 1.8390 • The above exchange rates correspond to annual averages for the indicated period

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This report was prepared by Mr. Joseph Martial RIBEIRO, Senior Irrigation Engineer, ONAR.2 (Extension 4533), Mr. Jacques Franssen, Environmentalist, PSDU (Extension 4728), and an Agro-economist Consultant, following a mission carried out in Tunisia from 19 October 2002 to 2 November 2002. Any enquiry relating to this report may be referred to either the authors or to Mr. Jean-Pierre RIGOULOT, Division Manager, ONAR.. 2 (Extension 4899).

ACRONYMS AND ABBREVIATIONS

ADB : African Development Bank AFESD : Arab Fund for Economic and Social Development BIOBANKA : Banque de l’Entreprise de Construction du Barrage BTS : Banque Tunisienne de Solidarité (Tunisian Solidarity Bank) CIDA : Canadian International Development Agency CRDA : Commissariat Régional de Développement Agricole

(Regional Agricultural Development Commission) CREDIF : Centre de Recherche et d’Etude sur la Femme (Gender Study Research

Center) DGB : Direction Générale des Barrages (Dams General Directorate) DGBGTH : Direction générale des barrages et des grands travaux

(General Directorate for dams construction works) DGGTH : Direction Générale des Grands Travaux Hydrauliques

(General Directorate for major water development works) ERR : Economic rate of return GDP : Gross Domestic Product GNP : Gross National Product IRR : Internal rate of return m3 : Cubic Metre Mm3 : Million Cubic Metres PDEN : Plan Directeur des Eaux du Nord (North Waters Master Plan) SEE : Société pour l’Expansion des Exportations (Canada)

(Exports Expansion Company) SONEDE : Société d’Exploitation et de Distribution des Eaux

(Water Supply and Expoitation Company -Canada) STEG : Société Tunisienne de l’Electricité et du Gaz

(Tunisian Electricity and Gas Company) TD : TD UA : Unit of Account UNTF : Union Nationale de la Femme Tunisienne (National Tunisian Women’s Union)

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BASIC PROJECT DATA

1. Country : Tunisia 2. Project : Sidi El Barrak Dam Construction Project 3. Loan Number : B/TUN/AGR-AME-94/51 4. Borrower : Government of the Republic of Tunisia 5. Guarantor : Tunisian Dinar 6. Beneficiary : Ministry of Agriculture 7. Executing Agency : General Directorate for Dams and Major Water Development Works (DGBGTH) A. LOAN APPRAISAL ACTUAL

ESTIMATE FIGURES

1. Amount (in UA Million) 54.20 21.00 2. Interest rate Variable Variable 3. Repayment period 20 years 20 years 4. Grace period 7 years 7 years 5. Loan Negotiation Date 05-11/09/1993 6. Approval Date 06/10/1993 7. Signature Date 11/05/1994 8. Date of Entry into Force 06/01/1995 B. PROJECT DATA 1. Total cost (in million UA) Appraisal estimate Actual figures 175.00 132.21 2. Financing Plan (in million

UA) Foreign currency

Local currency Foreign currency

Local currency

A. ADB 54.20 21.00 B. AFESD 36.37 10.92 33.73 C. BIOBANKA 24.56 D. Government 38.72 34.79 - 52.92 TOTAL 129.29 45.71 79.29 52.92 3. Effective date of first disbursement : 17 April 1996 4. Effective date of last disbursement : in 2003 5. Commencement of project implementation activities : 2 May 1994 6. Date of Completion of project activities : 31 August 2002

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C. PERFORMANCE INDICATORS 1. Cost Underrun (UA Million) : : 3.79 (18.06%) 2. Time Overrun / slippage on schedule : Slippage on effectiveness : 14

months

Slippage on completion date : 44 months

Slippage on last disbursement : 37 months

Number of extensions of deadline for last disbursement

:

3

3. Project

implementation status

: Physical implementation completed on 31/08/2002 Various final payments to be made in 2003

4. List of verifiable indicators and stage of completion (%)

- Transfer of 265 Mm3 /year to Seyjame Dam 100 - 21,690 ha of Supplementary Irrigation already in existence at Mateur and in Cap Bon 100 - 7,009 ha perennial irrigation of new plots at Nefza and Seyjane 100 - Potable water supply to a population of 4.2 million people 100

1. Institutional Performance : Unsatisfactory Fair Satisfactory X 2. Bank Performance : Unsatisfactory Fair Satisfactory X 3. Contractor’s Performance : Unsatisfactory Fair Satisfactory

HIDROTECHNIKA X SAROUBAT/STAM X ENTREPRISE ALI M’HENNI X EMIT X ANABIB/KANAOUT X O.T.C (OISIS TECHNICAL CORPORATE) X CYMI-MAKIBER X ETELEC X EFACEC X HIDOUSSI X STEG X AFRIQUE AUTO X ETS LOUKIL X BSB X SOTRADIES X

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SOCIETE ENNAKL X CITROËN X STT X LBM X COTAG X SCIENCES & TECHNO X EGETEPEC X ENEPLAST X INT MAGREB MEUBLE X SOTICO X STOA X SOCIETE E.M.I.T ERCOLE MARELLI X

7. Consultant’s Performance : Unsatisfactory Fair Satisfactory

SELKHOZ X BRGM/EDF X SECURAS X STEG X

8. Economic rate of return (%) APPRAISAL PCR 17.97 18.72 9. Financial rate of return (%) 12.03 14.21 D. MISSIONS

No. of Composition Man-Days Persons

- Appraisal 5 1 Agronomist 21 1 Agro-economist 21 2 Irrigation Engineer 42 1 Financial Analyst 21

- Supervision 10/2002 1 1 Irrigation Engineer 7

10/2001 1 1 Irrigation Engineer 7 07/2001 2 1 Irrigation Engineer 7 1 Environmentalist 7 05/2000 2 1 Environmentalist 5

1 Irrigation Engineer 5 05/1999 2 1 Environmentalist 5

1 Irrigation Engineer 5 04/1998 2 1 Environmentalist 5

1 Irrigation Engineer 5 11/1996 1 1 Irrigation Engineer 5

- Completion Report 3 1 Irrigation Engineer 7 1 Agro-economist 14 1 Environmentalist 6

__ ___ Total 174

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DISBURSEMENTS (UA Million) Estimate at Actual Percentage appraisal Figures Disbursed (%)

- Total Disbursed 54.20 21.00 81.95 - Amount cancelled 33.20 - Balance 3.79

- Annual disbursements

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Total

Estimated 8.96 15.59 13.59 12.41 3.65 54.20 Actual 0.00 0.00 1.30 2.25 4.33 3.98 2.34 2.03 0.98 3.79 21.00 % Disbursed 0.00 0.00 6.19 16.90 37.52 56.48 67.62 77.29 81.95 100 F. LIST OF CONTRACTS

- Name Ali M’henni Contractor

- Responsibility Realization of the water works intake - Date of contract signature 21 August 1996 - Date of contract expiry 21 October 1998 - Duration of contract 26 months - Amount (in UA Million) 6.85 - Name: Ali M’henni Contractor

- Responsibility Laying of pipeline and canal - Date of contract signature 13 May 1996 - Date expiry of contract 13 May 1999 - Duration of contract 36 months - Amount (in UA Million) 6.93 - Name: SAROUBAT/STAM - Responsibility Deviation of GP7 road

and feeder roads - Date contract signature 15 September 1995 - Date of expiry of contract 15 March 1999 - Duration of contract 42 months - Amount (in UA Million) 8.80 - Name: EMIT - Responsibility Supply and assembly of the

equipment of the pump station - Date of signature of the contract 11 July 1997 - Date of expiry of the contract 11 September 1999 - Duration of contract 26 Months - Amount (in UA Million) 2.96

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SUPPLIERS - Name : OISIS TECHNICAL CORPORATE

- Responsibility Supply of hydro mechanical material for the pipeline

- Date of signature of the contract 4 December 2000 - Date of expiry of the contract 4 August 2001 - Duration of contract 8 months - Amount (in UA Million) 0.10 - Name : SOTRADIES

- Responsibility Purchase of FW drive vehicles - Date of signature of contract 23 August 1996 - Date of expiry of contract 23 February 1997 - Duration of contract 6 months - Amount (in UA Million) 0.04 - Name : ENNAKL

- Responsibility Procurement of POLO vehicles - Date of signature of contract JJ MM AAAA - Date of expiry of contract JJ MM AAAA - Duration of contract 6 months - Amount (in UA Million) 0.04 - Name : CITROËN - Responsibility Purchase of C15 vehicles - Date of signature of contract 20 April 1995 - Date of expiry of contract 20 October 1995 - Duration of contract 6 months - Amount (in UA Million) 0.06

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EXECUTIVE SUMMARY 1. Within the global context of its social and economic development programmed , Tunisia conceived a North Waters Master (PNDEN) since 1969 with a view to mobilizing surface and ground waters of the country’s North basins which constitute a quarter of the national territory and where 80% of water resources are concentrated. The major objective of PDEN is to divert the waters of the coastal basins and the basins of lake Ichkeul toward the Medjerda basin to feed the current or future irrigation networks/systems and meet the requirements for drinking and irrigation water in the Central and Southern regions. The implementation of the water resources mobilization programme was carried out within the scope of the five-year plans including the 9th(1997-2001) which has just ended with the construction of the Sidi El Barrak dam and the mobilization of 375 out of 495 million of m3 as part of the big dams provided for during that phase. With 265 million m3 the Sidi El Barrak contributes over 70% of water resources mobilized during the 9th five-year plan as part of the major dams. 2. Since 1971, the Bank has given its assistance to PDEN and contributed to the financing of 5 agricultural development projects including the Sidi El Barrak dam complex . A total of UA 79.44 was mobilized for these projects.

3. The purpose of the Sidi El Barrak Development Project was to construct a dam in order to mobilize 265 million m3 of water and transfer structures making it possible to pump the water from the dam and transfer it into the Sejnane dam with a view to supply drinking water to urban towns of Greater Tunis , Cap Bon, Sahel and Sfax, contribute to the ecological balance of Lake Ichkeul, provide permanent irrigation over 5,500ha of new farming plots in the project area and supplementary irrigation over 9,500 ha in the Cap Bon region.. Furthermore, putting in place project infrastructures will make it possible to supply drinking water to nearly 3.48 inhabitants. In addition to the dam and to transfer structures, the project consisted in constructing 24 km of secondary roads as opposed to 20.7 km initially envisaged. These roads made it possible \to open up the villages in the project area. On completion of the project in 2002, all the physical objectives had been reached or exceeded in some cases to the extent that hydro-electric energy production which had not been provided for at the beginning was envisaged with the construction of a 600 KVA mini-hydro-electric power station thus making it possible to cover rural electricity requirements to a population of over 33,000 people with effect from 2008.

4. The project was executed over a period of 7 years and 8 months, from January 1995 to August 2002. It was completed with a 44 months delay compared to the schedule established at appraisal. This delay was due to the fact that the initial provisional schedule was over optimistic, particularly the 14-months slippage on effectiveness, and the complexity of works. Despite these delays, the project was successfully completed.

5. The total project cost on completion stood at UA 132.21 million tax and duty-free against UA 15 million estimated at appraisal, or a cost reduction in the range of 24.45%. The downward trend of the cost amount was a result of the difference between the estimates and the actual costs owing to the savings made in respect of the works contracts (2.39%), and the trend of the exchange rate which rose from TD/UA 1.3775 at appraisal to TD/UA 1.8390 in October 2002 with an average variation of 22.06% over the duration of the project.

xi

6. The project has economic consequences extending from the drainage basin of the dam (Nefza region) to Cap Bon. The economic impact of the project revealed four types of benefits, especially with regard to : (i) irrigation (nearly 7,009 ha of new plots will be used for market gardening, fodder crops and citrus fruit farming with perennial irrigation while 21,690 ha of existing citrus fruit will benefit from supplementary irrigation ; (ii) supply of drinking water in the regions of Greater Tunis and the Governorates of Bizerte, Sousse, Monastir, Mahdia and Grand Sfax, for a population of 4.2 million people; (iii) distribution of electricity to a rural population of over 33,300 persons ; et (iv) various intangible impacts such the improvement in the living and health conditions of the rural population with increase in incomes, easier access to public utilities , reduced women’s heavy work , opening up of regions of the project with the dam construction works (construction of roads and opening of tracks /site roads), and the implementation of soil conservation measures. 7. The economic rate of return of the project at project completion stood at 18.72% compared to 17.97% at appraisal. The fact that the ERR is higher than that obtained at appraisal is due to the fact that the project produces greater benefits than those envisaged at appraisal Consequently, the level of the project’s economic rate of return is confirmed and in fact exceeded . The ERR calculated corresponds to the minimum economic return of the project because the intangible economic benefits was not evaluated quantitatively. 8. The project is classified in Environmental category I. However, the negative impact on the project on environment essentially linked with the displacement of persons initially housed in the right-of-way of the pool elevation was mitigated by the implementation of recommendations of an impact study. A Regional Steering and Monitoring (SMC) was in fact set up within the Beja Governorate to ensure the execution of the attenuating. From the social the social viewpoint, the project has fully compensated nearly 1370 displaced persons and they currently are benefiting from the positive impacts of the project. Furthermore, women daily chores have been made less hard because of the availability of drinking water. In addition, the project will benefit nearly 57,400 persons in terms of irrigation and to 4.2 million people with respect to drinking water supply. 9. In light of the foregoing, the project’s implementation is considered satisfactory in that the project technical components were successfully executed. The success of the project is the result of the roles played by the Borrower and the Bank. The Borrower accomplished his responsibilities and played his role effectively. On the basis of these results, the performance of the Borrower has been rated satisfactory. The Bank played its role effectively over the entire project cycle, especially through project supervision and regular disbursements of most of the Borrower’s requests for payment.

10. Despite the delays in the implementation and execution of some engineering works, the project was successfully completed. Consequently, the project’s implementation was satisfactory. To sustain the project’s outcomes, it is vital that the Borrower and the Bank identify training measures for water management and infrastructure maintenance just as they should ensure that supplementary equipment is provided to the team responsible for the management of infrastructure. Furthermore, the Bank should capitalize on he lessons to be drawn from the problems met in the implementation, especially in the execution of engineering works and the application of contracts procurement procedures with a view to increasing the flow of operations.

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PROJECT MATRIX

OBJECTIVELY VERIFIABLE INDICATORS NARRATIVE SUMMARY

At Appraisal On completion MEANS OF

VERIFIFICATION ASSUMTIONS AND

RISKS 1. SECTOR GOAL 1.1. To promote economic and social

development Change in the quality of water supplied to the beneficiary regions

Salt in the quality of water dropped by 0.5g/l in the reservoir and improved by 1.52 to 1.37 g/l at Cap Bon.

Ground water exploitation rate Brought up to 71 % on completion of the project

• National Statistics • Beja CRDA annual reports • Various studies

2. PROJECT OBJECTIVES To mobilize 188 million m3 yearly for

irrigation and supply of drinking water for Cap Bon, de Sfax, Grand Tunis and Sahel

35 million of m3 of 0.5g/l of salt water mobilized for the continuous irrigation of the watersheds and the equilibrium of Ichkeul Lake 153 million

54 million m3 of 0.5 g/l of salt water mobilized for the continuous irrigation of the drainage areas and the balance of Lake Ichkeul

Report on the Dam’s operation

m3 transferred for the supply of drinking water and the supplementary irrigation of the orchards in Cap Bon

179 millions of m3 transferred to Sejnane for the supply of drinking water, supplementary irrigation and production of electricity.

Report on the Bank’s operation

Normal climate and rain gauge

3. PROJECTED AND ACTUAL OUTPUTS 3.1 Dam and operational transfer structures Dam of 264 million m3 and transfer

structures of 153 million m3/year to the Sejnane Dam

Achieved by 100%

3.2 To increase the production of citrus fruits of Cap Bon and develop agricultural produce in the drainage area

Raise by 1.8T/ha the yield of Cap Bon citrus fruits and increase the vegetable, fodder and grain crops in the farming areas in the watershed

Increase by 1.8T/ha of citrus fruits yield at Cap Bon , expanded farming areas for grain and cereal crops and introduction of citrus fruits at Ouchtata

3.3 Feeder roads built or rehabilitated 7.1 Km of paved trunk highway to be built 7.1 Km of paved major highway built. 13.6 km pathways to be constructed 23 km of secondary roads 3.4 Resettlement of displaced populations 660 new housing and 510 farms 1,370 families concerned by the dam’s right-

of-way were fully resettled. 3.5 Protection of drainage Reforestation of fragile parts 100 % protection of drainage areas 3.6 The project is viable from the economic

and financial viewpoint Economic Rate of Return (ERR) : 17.97 ; Financial Rate of Return (FRR) : 12.03

Economic Rate of Return (ERR) : 18.72 ; Financial Rate of Return (FRR) : 14.21

Borrower’s completion report • External financing required

was mobilized normally • Counterpart funds were

mobilized normally

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4. ACTIVITIES COSTS (in UA million) COSTS (in UA Million ) 4.1 Establishment of the Project

Management Unit Dam

71.22 Dam

68.01 4.2 Negotiations with the displaced persons

and establishment of reception facilities Construction of the reservoir 38.52 Construction 12.37

4.3 Construction of the dam Transfer structures 34.04 Transfer structures 29.34 4.4 Construction of transfer structures Inspection and Supervision 9.93 Inspection and Supervision 9.93 4.5 Construction of feeder roads Implementation Unit 21.29 Implementation Unit 12.55 4.6 Inspection and Supervision Total 175.00 Total 132.21 RESOURCES

(in UA Million UC) RESOURCES

(in UA Million)

ADB 54,20 ADB 21.00 AFSED 47,29 AFSED 33.73 BIOBANKA 0,00 BIOBANKA 24.56 Government 73,51 Government 52.92 Total 175,00 Total 132.21

Borrower’s completion report

The project was implemented as planned

1. INTRODUCTION 1.1 Situated at the extreme North of the African continent, Tunisia has a temperate climate in the northern quarter of its territory but remains in the arid and semi-arid zone in the Central and Southern quarter of its territory. Thus, in the Northern part of the country, 78% of surface water is concentrated on a quarter of the national territory which presents a considerable regional imbalance in terms of distribution of surface water resources.. 1.2 This situation led the Tunisian Government to undertake , with effect from 1969, the study and the implementation of Northern Waters Master Plan (PDEN). The latter’s goal is to mobilize the water resources of the country’s northern basins (coastal basins and Lake Ichkeul basins) and transfer them to the Oued Medjerda basin located in the center of the country. The objectives of PDNE are essentially on one hand, to contribute to meeting drinking water requirements and for the industrial use of Greater Tunis as well as the most important Central and Southern towns (Sousse and Sfax),supply water to existing or projected irrigated perimeters by bringing to the Cap Bon region additional irrigation water , and on the other hand, contribute to energy production. 1.3 It is within this context that the Bank was approached to finance the Sidi El Barrak Dam Construction Project which is a major component of PDEN. The Bank’s assistance was initiated in 1971 with the study of Medjerda Valley Development Study for an amount of UA 2.4 million within the scope of PDEN. Since then, the Bank has intervened in the financing of twelve (12) operations , or five (5) irrigation scheme projects, two (2) lines of credit and five (5) agricultural integrated development projects with a net total amount of UA 330 Million. 1.4 This completion report was prepared on the basis of Bank supervision reports, progress reports and the completion report of the Project management unit (the Direction Générale des Barrages et des Grands Travaux Hydrauliques - DGBGTH), as well as data and documents collected during the mission carried out in Tunisia from 19 October to 3 November 2002. 2. PROJECT OBJECTIVE AND FORMULATION 2.1 Project goal 2.1.1 The sector goal of the Sidi El Barrak Development Project is to contribute to the economic and social development in the rural area. Its specific objective is to mobilize 188 million m3 of water annually to the Sejnane dam within the context of PDEN. The achievement of this objective will have the following spin-offs : supplementary irrigation of 9,5000 ha of existing perimeters , continuous irrigation of 5,500 of new plots in the watershed of the dam , supply of drinking water to a population of 3.48 million persons. . 2.2 Project Description 2.2.1 The project consists in the construction of a dam-reservoir of a total capacity of 264 million m3, of a pumping station followed by a discharge pipe and a water transfer gallery to the Sejnane dam. The execution of these works also required the construction of feeder roads as well as the implementation a displaced resettlement programme.

2

2.2.2 The project components are :

a. Dam Construction ; b. Construction of the reservoir ; c. Construction of transfer structures ; d. Works inspection and supervision ; e. Project implementation Unit .

2.3 Project Formulation 2.3.1 The Tunisian Government accords great priority to the social and economic actions promoting the interaction of the rural population in the development process. Thus, to increase agricultural production , principal income-generating activity in rural areas, and reduce the dependence on vagaries of the weather , the long-term water sector strategy(2030) in Tunisia aims at mobilizing all the resources identified. To this end, the water resources mobilized , mainly present in the North-West of the country are transferred through the interconnection of hydraulic structures to the central and southern regions in which there is a shortage with a view to creating an inter-regional balance. 2.3.2 The Sidi El Barrak Development Project is part of this strategy and should contribute to raising the water resources mobilized from 71% to the total potential estimated at 1.4 billion m3. 2.4 Preparation, Appraisal, Negotiation and Approval 2.4.1 Studies for the realization of the Sidi El Barrak Development project were carried out in 1992 and the international competitive bidding for the construction of the dam was launched in 1994. The construction of the dam took on a emergency character since the analysis and the confrontation of the evolution of the requirements in water resources in Tunisia revealed shortages estimated at 4.3 million m3 with effect from 2008 that would reach 28.3 million m3 in 2010. Hence the Sidi EL Barrak dam had to be operational in 2003 at the latest to make up for the water shortage. 2.4.2 The Bank appraised the project in June 1992 on the basis of a feasibility study carried out by CNEA (Centre National d’Etudes Agricoles). The Environmental Impact Study was also conducted by CNEA. Negotiations took place on 6 and 7 September 1993 in Abidjan and the loan was approved by the Board of Directors in October 1993. The loan agreement was signed on 11 May 1994 ; this led to a project start-up slippage which was scheduled to commence on 1993 at the time of appraisal. 3. PROJECT IMPLEMENTATION 3.1 Loan Effectiveness and Project Start-up 3.1.1 The loan entered into force on 6 January 1995, 7 months after the loan agreement signature and 13 months after the loan approval by the Bank. The latter delay exceeds the maximum deadline of 180 days required by the Bank, and was due to prerequisites for filling the financing gap.

3

3.1.2 With regard to general conditions, project status reports and audit reports on expenditure made from loan proceeds were regularly transmitted to the Bank. The agreement included ‘’another condition’’ aimed at the resettlement and compensation of the displaced population not later than 31 December 1995. The resettlement was conducted in satisfactory manner on a participatory approach with the persons concerned (see Section 5). 3.1.3 The project’s implementation commenced on 2 May 1994 with dam construction works with parallel financing from AFSED and the BIOBANKA, even before the loan agreement was signed by the Bank. Bank-financed activities started on 15 September 1995 with the issue of tenders for the construction of the hydrant as well as that of the main and the canal. Bidding documents were submitted for Bank approval in April 1996 and the first contracts were signed in May 1996 for the construction of the main and the canal. The service order/instruction for the construction of the dam itself was given in May 1994. 3.2 Procurement 3.2.1 All bids for the procurement of works and equipment financed by the Bank were made in conformity with the provisions of the appraisal report and in accordance with Bank rules and procedure. Contracts for the construction of transfer structures and the reservoir as well as works inspection and supervision were awarded following international competitive bidding ; contracts for the construction of domestic site and those for resettlement of displaced persons were subject of local bidding as well as contacts for vehicles, supply of office equipment and of domestic site city . The contract for the displacement of electric lines , supply of electric power and supply of high voltage station was awarded by private contract with the Société Tunisienne de l’Electricité et du Gaz (STEG), in accordance with the provisions of the appraisal report. 3.2.2 the dam construction works were financed with a an AFESD credit and that of BIOBANKA. BIOBANKA’S was made through a loan granted to the HIDROTECHNIKA company within the context of a protocol agreement for financing dam works. 3.2.3 The engineering studies of the project were carried out by the consulting firm International SELKHOZ with financing from the Russian Government within the scope a cooperation programme with the Tunisian Government, and works inspection and supervision were realized by several service providers according to the nature of the works. The STEG in particular was responsible for the study and supervision of the HV 90V line, SECURAS the dam, the pumping station, the bridge infrastructures and the roads, BRGM/EDF for the drainage works. 3.2.4 No complaint was made by the borrower or the contractors/consultants during the project’s execution. Nevertheless, the procedure for contracts approval and for settlement of contractors seem to have experienced long delays which could be reduced.. In fact , a six-month delay in the approval procedure and 90 days for the payment of contracts are acceptable. Yet, most final payments are settled within a six-month average whereas the average for the approval of contracts is often over 12 months. While maintaining rigor in the control , deadlines should be improved to increase efficiency in the implementation of the project. Roads were constructed over 63 months instead of 42.

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3.3 Modifications 3.3.1 No significant technical changes were made compared to the initial design. However, the project was modified in terms of cost and ADB financing. The project was executed at a cost of UA 132.21 million against UA175.00 million, or a drop of 24.45%. The ADB loan was UA 54.20 million and three successive partial cancellations of UA 16million on 26 March 1997, UA 12.20 million on March 1999 and UA 5 million on 27 August 2001. The final net loan cancellations therefore amount to UA 21.0 million , or 38.75% of the initial loan. Cancellations were first of all due to the depreciation of the TD against the UA during project implementation. This was 33.13% between the appraisal (1 UA to TD 1.3775 in June 1992) and the preparation of the PCR (1UA to TD 1.8339 in October 2002) and 22.06% on average over the duration of the project which corresponds to the depreciation over the period and makes it possible to explain in part the cost fall. The difference in the cost fall (2.39%) is due to savings that were made after bidding given that most foreign enterprises sub-contracted a good part of their services to local Tunisian firms generally less costly due to the fact of performance level in terms of efficiency wage rate . It should be noted however, that despite these cancellations, the resources made available to the Borrower by the ADB were used to finance the total foreign exchange cost of transfer structures , installation of the reservoir and the project implementation unit in conformity with appraisal report. Furthermore, BIOBANKA’s financing which was not provided for in the initial financing plan was introduced on the basis of a protocol agreement to finance dyke works which stipulated that the contractor retained for the works should obtain financing from a private bank. 3.3.2 Furthermore, in the initial project design, energy production was not envisaged in the realization of infrastructure. However, in view of the volume of water transferred to Sejnane (over 150 million m3) and the depth of the backing up of the water supply point (120 m), the Borrower , following the feasibility study by STEG , had a 600 KVA mini- hydraulic power plant with a capacity to reach 1,200 KVA with effect from 2008, and able to produce 4 Gwh/year from 2008. The construction of the mini plant was designed independently and concurrently with the completion of works with Tunisian financing and that of AFD to the tune of 50% of the investment cost estimated at TD 3 million for the first phase (2002-2005) and an additional TD 4.5 million for Phase II (starting from 2006). Thus, without affecting the execution of works scheduled as part of the project , the installation of the mini power plant made it possible to convert the dynamics of the water transformation into electric power thus increasing the spin-offs and achievements of the project. During the completion mission, the mini-station was at an experimental stage 3.4 Implementation Schedule 3.4.1 The initial project implementation was scheduled over a six-month period from January 1993 and December 1998. This period was largely exceeded because the final works executed within the context of the project were only completed in August 2002. This considerable slippage on implementation of forty-four (44) months was mainly due to the fact that the delay in loan effectiveness was not taken into account at appraisal, to which the Bank gave a maximum of one year after its approval by the Board of Directors, but also given that the initial schedule was optimistic. In fact, the first ADB-financed works only started on 15 September 1995 instead of 20 October as provided in the appraisal report.

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3.4.2 The table below gives a comparison of the provisional and actual implementation schedule.

Table 3.1 Provisional and actual implementation schedule

Commencement of works Implementation as at

30 September 2002 End of Works Components

Projected Realized Projected Realized Initial Projected

Dam May 1994 May 1994 100 % 100 % Sept 1999 Sept 1999

Lot II Road Sept-95 Sept. 95 100 % 100 % Feb-99 Dec. 2000 Hydrant

August 1996

August 1996

100 %

99 %

Sept 1998

Nov.. 2002

Pipeline l

June 1996

June 1996

100 %

99 %

April 1999

Dec. 2002

Hydromechanical supply to the pumping Station

March 1998

March 1998

100 %

100%

May 2000

Dec. 2000

Hydromechanic supply of the pipeline

Dec. 2000

Dec 2000

100%

100%

August 2001

August 2001

Transmission supplies March 1995 March 1995 100 % 100 % Dec. 1997 Dec. 2000

Supply of cables and line equipment Nov 1999 Nov 1999 100 % 100 % March 2000 June 2000

Installation of the electrical line Dec 1999 April 2000 100 % 100 % Dec.2000 August 2001

The provision of the transformer sub components

April 2000 August 2000 100 % 100 % April 2001 January 2002

Civil works April 2000 May 2000 100 % 100 % Dec.2000 August 2001

Reinstallation of displaced people January 1994 January 1994 100 % 100 % December

1997 December 2000

End of project works October 1992 May 1994 100 % 100 % December 1999 August 2002

3.5 Reporting The project implementation agency regularly submitted to the Bank over the period of the project execution 32 (thirty two) activity reports (until October 2002 inclusive) and six (6) audit reports on receipts and expenditures carried out on the resources of the project for the period from 1995 to 2002, in conformity with the Bank’s requirements. The latest report (fiscal 2001) has not yet been submitted to the Bank, thus registering a 4 month-time delay. The frequency of submission of these reports was quarterly for the activity reports and annual for audit reports. 3.6 Financing and Disbursement Sources 3.6.1 Financing Sources : The total effective project cost net of taxes and levies, stood at UA 132.21 million, of which UA 79.29 million in foreign exchange, representing 59.97% and UA 52.92 million in local currency, representing 40.03% of total cost. The costs of duty are estimated at nearly 18% of the total amount. In comparison to the estimated cost at appraisal which stood at 175.00 (UA 129.29 millions in foreign exchange and UA 45.71 million in local currency ), the project total cost registered a fall of UA 42.79 million, corresponding to the reduction of 24.45 %. Table 3.2 below presents the cost comparison by components at completion and appraisal.

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Table 3.2 Table of Project Comparative Costs by Component

(in UA Million UA)

Estimated Costs at Appraisal Costs on Completion COMPONENTS Foreign

exchange Local

Currency Total Foreign

Exchange Local

Currency Total Variation

(%)

A. Dam Construction 49.79 08.07 58.49 45.10 13.39 58.49 0.0 B. Construction of the reservoir 25.67 05.08 30.75 07.49 03.14 10.63 -65.42 C.. Transfer structures 22.20 05.69 27.89 15.43 09.86 25.28 -9.35 D. Inspection and Supervision 05.30 02.60 07.90 0.17 12.62 12.79 61.91 E. Implementation Unit 04.02 13.44 17.46 0.05 06.50 06.55 -62.51 Total Base Cost 106.98 35.51 142.49 68.24 45.51 113.74 -20.17 Physical Contingencies 10.47 03.55 14.25 07.14 04.76 11.90 Financial Contingencies 11.61 06.65 18.26 03.97 02.65 06.61

PROJECT TOTAL 129.29 45.71 175.00 79.34 52.92 132.21 -24.45

(in TD Million)

Estimated Cost at Appraisal Cost on Completion

COMPOSANTES Foreign exchange

Local Currency

Total Foreign exchange

Local Currency

Total Gap (%)

A. Dam Construction 68.59 11.09 80.58 80.24 23.82 104.06 29.14 B. Construction of the reservoir 35.36 07.00 42.36 13.33 05.59 18.92 -55.34 C..Transfer Structures 30.58 07.84 38.43 27.44 17.54 44.98 17.04 D. Inspection and Supervision 07.31 03.58 10.83 0.30 22.45 22.76 110.16 E. Implementation Unit 05.53 18.51 24.04 0.09 11.56 11.64 -51.58 Total Base Cost 147.37 48.92 196.29 121.40 80.96 202.36 3.09 Physical Contingencies 14.74 04.89 19.63 12.70 08.47 21.18 7.90 Financial Contingencies 15.99 09.16 25.15 07.06 04.71 11.17 -55.59

PROJECT TOTAL 178.10 62.96 241.06 141.16 94.14 235.30 -2.39 • All costs are expressed tax and duty free. 3.6.2 The trend in the project cost shown in the tables exhibits a 24.45 % decline between the appraisal in June 1992 and completion in October 2002 (Table in UA). It shows the overall trend in the project cost expressed in foreign exchange over the duration of the project. Expenditure being expressed in TD, the trend in cost translated in TD in the table shows the portion of the savings made (-2.39%) on procurement which, if deducted from the total exchange trend gives the share of fluctuations due to exchange rate (-22.06). 3.6.3 The financing plan on project completion compared to the appraisal estimate is as shown in Table 3.3 hereunder :

Table 3.3 Comparative table of project costs by sources of finance

(in UA Million)

Appraisal cost estimates Costs on Completion SOURCES DE FINANCE Foreign

Exchange Local

Currency Total Foreign

Exchange Local

Currency Total Gap (%)

A. ADB 54.20 54.20 21.00 21.00 -61.25 B. AFESD 36.37 10.92 47.29 33.73 33.73 -28.68 C. BIOBANKA 24.56 24.56 100 D. Government 38.72 34.79 73.51 - 52.92 52.92 -28.01

TOTAL 129.29 45.71 175.00 79.29 52.92 132.21 -24.45 % of Total Cost 73.88 26.12 100.00 59.97 40.03 100.00

• All costs are expressed tax and duty-free 3.6.4 The downward trend of the loan amount is explained by the 2.39% savings made within the context of works contracts and by the fluctuation of the rate of exchange which rose from 1.3775 at appraisal to 1.8390 Tunisian Dinars (TD) per Unit of Account (UA).

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BIOBANKA which did not figure in the financing plan at appraisal was introduced during the implementation to assist the enterprise responsible for the dam construction in paying its counterpart for that structure, in accordance with the conditions provided for the execution of the contract. 3.6.5 Disbursement : ADB loan disbursements which were spread over a six-year period, from 1993 to 1998, were in fact disbursed in 9 years, from 1995 to 2003, owing to considerable delays in the procurement process , 64 months delay in the construction of the dam, the time taken to realize the transfer structures and the overall complexity of the works. The expenditure schedule on completion compared to that at project appraisal is as follows : Table 3.4

Comparative Table of Expenditure Schedule (in UA Million)

a) For the entire project

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Total Estimated 12.51 40.54 42.47 41.00 29.66 8.82 175.00 Actual 0.0 6.88 11.92 24.23 23.33 16.72 14.73 7.53 22.10 0.98 3.79 95.17

% Disb. 0.0 5.21 14.22 32.55 50.19 62.84 73.98 79.68 96.39 97.13 100 (total) b) From ADB financing 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Total Estimated 8.96 15.59 13.59 12.41 3.65 54.20 Actual 0.00 0.00 1.30 2.25 4.33 3.98 2.34 2.03 0.98 3.79 21.00 % Disbursed 0.00 0.00 6.19 16.90 37.52 56.48 67.62 77.29 81.95 100 (total) 3.6.6 The above tables show that at the date of the mission, the loan disbursement rate

stood at nearly 81.95 %, with the balance of ADB financing was fully committed for the final payments expected in 2003. Based on this, it can be deduced that the project billing rate was 1f00% on completion. Consequently, it can be rightly assumed that the project implementation was satisfactory with respect to expenditure commitments.

4. PROJECT PERFORMANCE 4.1 Overall Assessment The loan agreement was signed by the two parties with a 7-months delay. On the other hand, the general and other loan conditions were regularly fulfilled. From a technical viewpoint, the project objectives were exceeded compared to those set at appraisal. The project has made possible an annual storage of 250 millions m3 against the 188 projected, thus contributing to the implementation of the PDEN and the country’s IXth social and economic development plan.

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4.2 Operational Performance 4.2.1 The project was fully executed and completed satisfactorily, despite the delay experienced. During the industrial tests which were carried out from November 2001 to November 2002, a total of 31 millions m3 was channeled to the Sejnane dam. Besides , depending on the filling status of the upper pond level, a maximum of 264 million m3 can transferred annually considering the turnover of the equipment at the pumping station. Furthermore, the project made it possible to mobilize nearly 34 and 28 million m3 for irrigation respectively in the catch basins respectively in and in the Cap Bon citrus orchards, 20 millions m3 for the ecological balance of Lake Ichkeul, and 110 millions m3 for the supply of drinking water to a population of 4.2 million compared to the 3.5 million provided for. 4.2.2 The grassroot beneficiaries can thus achieve better operating results and/or have access to better quality drinking water at minimum cost (90 millimes/m3 instead of 250 to 500 millimes/m3). In addition to irrigation and potable water, the project made it possible to generate electricity, with a TD 1.6 million net annual income for STEG, at full development, during the transfer of water to Sedjane. In this way, the project will enable the government to fulfill its economic and social contract with the people, by making annual savings of TD 10.56 million , with an adjustment of the cost of water from 50 to 90 millimes. The company for the Operation of the Canal and North Waters Supply (SOCADENORD), which is responsible for the management of hydraulic resources, has additional hydraulic resources to make available to the Beja CRDA, for irrigation and to the National Water Operations and Distribution (SONEDE), in charge of the supply of drinking water in Tunisia will have the resource valued at TD l6.6 million . This will contribute to reducing water production costs for these Structures and will enable them to balance their operating results at least cost. On the basis of these outcomes, the project’s operational performance was satisfactory. 4.3 Institutional performance The project was identified in 1992 measures implemented by the General Directorate for Dams (DGBGTH) in the Ministry of Agriculture, making it possible to lay the foundation for its preparation. The creation of the General Directorate was a result of the transfer of the General Directorate of Major Hydraulic Works (DGGTH) from the Ministry of Equipment to the Ministry of Agriculture. In February 2001, the DGB became the General Directorate for Dams and Major Hydraulic Works (DGBGTH), through a merger with the General Directorate for Studies and Major Hydraulic Works (DGEGTH) which existed concurrently at the Ministry of Agriculture. The setting up of this structure facilitated the coordination of research activities and works implementation, with more effective definition of roles and missions. This made it possible to execute the project more effectively. 4.4 Management and Organization Efficiency

4.4.1 The organization of the DGBGTH differed from that of the DGB, compared to what it was in 1992. It is comprised of 4 departments : (i) Directorate of water mobilization studies, (ii) General Directorate for Major hydraulic works, (iii) Major Dams Directorate, and (iv) the Dams Management Directorate. Based on this organization and the experience gained through dam projects, there is evidence of definite improvement and operational capacity that can ensure quality professional support.

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4.4.2 The project site monitoring and management team included Tunisian government officials, professionals or other locally hired workers of different categories. The inspection and supervision team comprised the SELKHOZ group for studies, BRGM/EDF for the supervision of drainage works, STEG for the feasibility study, inspection and supervision of works for the installation of the high voltage lines, and SECURAS for the inspection and supervision the dam construction and related works, as well as the construction of the reservoir. The participation of all these companies was efficiently coordinated by the project monitoring and management team. In light of the above results the, the institutional performance is satisfactory. 4.5 Capacity Building, Staff Development and Training The DGBGTH has many engineers, scientists, technicians and all other categories of employees that makes it well qualified to ensure its role in planning and management of hydraulic structures over the entire Tunisian territory. The Sidi El Barrak project execution enabled them to fill several contractual posts of which certain are occupied by women staff. On the basis of the results obtained in the field, it can be ascertained that management has the requisite well qualified personnel to ensure the success of its mission. Furthermore, the realization of the project helped to increase the experience of the staff, thanks to the lessons learnt in the field and also through the training the staff received in the course of the project. On this basis, it can be concluded that the DGBGTH possesses sufficient staff both in number and quality, whose reinforcement, training and skills development were carried out satisfactorily under this project. 4.6 Performance of Consultants, Contractors and Suppliers 4.6.1 Performance of Consultants : SECURAS, BRGM/EDF, SELKHOZ and STEG consultants who were responsible for the supervision and inspection of the entire works on site showed professionalism and objectivity in resolving conflicts and preparing the enterprises payment documents each within their area of intervention. On this basis, the performance of consultants was deemed satisfactory. 4.6.2 Performance of Contractors : Contractors fulfilled their commitments in a satisfactory manner and the project was successfully completed. Their performance was satisfactory taking into account difficulties on site especially the mountainous relief and problems caused by geological formations encountered in the course of dam construction works, the pipeline and feeder roads. All the works carried out and the equipment supplied and installed under the project were in conformity with the technical specification of the bid documents. 4.6.3 All contractors involved in the construction of the dam, (HIDROTECHNIKA), executed works for the installation and equipment of the pumping station (EMIT), the installation of the main and the deepening of the interconnection canal (Ali M’henni Entreprise), the construction of feeder roads (SOROUBAT/STAM Group) and the installation of the electric line (ETELEC and EFACEC), accomplished their tasks with professionalism and within acceptable periods. No significant delay was recorded in the execution of different contracts. Consequently, the overall contractors performance was considered satisfactory.

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4.6.4 Performance of suppliers : The suppliers of laboratory equipment (COTAG, STT, LBMSTE and TECH), rolling stock (SOTRADIES, CITROËN and ENNAKL), furniture and household equipment (SOTICO and INT MAGRHEB MEUBLE), provided quality services under the project in conformity with the specifications. All of them received their payments. Their services were deemed satisfactory on the basis of their results. 4.7 Financial Performance 4.7.1 The implementation of this project generated financial benefits at four levels, namely : (i) perennial irrigation over nearly 7000 ha and supplementary irrigation over 21.690 ha of citrus fruits with very good quality water (0.5 g/l of salinity (ii) supply of potable water to a population of 4.2 million people in the Greater Tunis region and the governorates of Bizerte, Madhia, Sousse, Sfax, Cap Bon; and (iii) provision of electricity to the rural population (over 33,000 persons) from a mini-hydraulic power plant. The annual income generated by the project at full development was estimated at 74 millions Dinars for the entire project. 4.7.2 Irrigation will provide incentive for the production of traditional crops such as cereals including wheat, animal feed and market crops, but also arboculture including citrus fruits and olives, legumes such as broad beans as well as livestock, especially dairying and cattle breeding. An analysis of budgets for cropping and animal production activities shows that animal and agricultural production activities provided a 56% increase in revenue for all the farms under the impact of the project during the year at full development . 4.7.3 The internal rate of return (IRR) estimated on project completion over a 40-year period is based on the calculation of costs/benefits generated by direct spillovers from perennial and supplementary irrigation, drinking water supply and electricity distribution. With regard to irrigation, the computation is effected taking into account the cost of irrigation infrastructure at project cost, cost of connection to the irrigation system, cost of water utilization comprising direct cost of water estimated at 50 mollies per m3, equipment maintenance and replacement cost and the yield on farm price of agricultural products concerned in respect of the operating accounts of envisaged cropping (see annex 10 on irrigation data). Computation of the financial internal rate of return in respect of water supply takes into account the portion of the project cost allocated for water consumption, or TD 134.33 million for nearly 151 million m3 (57% of volume of stored water), water production cost, connection price at TD 500 million over a 10-year period for more than 830 000 rural households and the price of potable water in rural areas estimated at 90 millimes/m3. As far as the electricity spillovers are concerned there was no impact on the project cost given that it was just a transformation of the dynamics of water transferred to Sedjane through the mini- plant. Consequently, costs taken into account in the calculation are the cost of building the mini-station estimated at TD 7.5 million, interest payments (6.75% over half the amount for an 8-year grace period), connection cost for nearly 6,66o families and the recurrent production cost of electricity. 4.7.4 Based on the comparison of the situation between the costs/benefits without project and the situation of costs/benefits with the project, the project internal rate of return (IRR) estimated at 14,21%. This is much higher than the capital opportunity cost estimated at nearly 12% . The sensitivity analysis shows an IRR of 14.03% when revenues decrease by 10%, and 13.74% for production values reduced by 15%. The IRR is null for a drastic

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revenue reduction of products of 57.28% (see annex 5). On the basis of these outcomes, the financial performance of the project was considered satisfactory. 4.8 Economic Performance 4.8.1 The economic benefits of the project are in two categories : tangible and non-tangible benefits. Tangible benefits can be broken down into three . They include, in particular, benefits linked to the economic value of potable water, irrigation, production and distribution of electricity in rural areas. Non-tangible benefits on the other hand, comprise the improvement of the quality of life and health conditions of the rural population through increased incomes, easier access to public utilities (water and electricity), reduction of the women’s work load, opening up of the regions in the project area through the building of the reservoir (roads construction and opening of tracks), and the development of soil conservation activities around the reservoir in the quarantine zone. 4.8.2 The economic value of water consumption was obtained by calculating the value of a m3 of water at current pump rates paid to the water distribution company, net of taxes and duties. Even though billing is done by unit of consumption, the highest rate was the one used for economic evaluation which was estimated at approximately 500 thousand /m3 of potable water, according to the information collected on site. Water is pumped by the hydrant at a cost of 90 millimes/m3 over and above the project cost rate of return corresponding to the supply of drinking water equivalent to 19.82%, which is substantially higher than the opportunity cost of capital estimated at 12 %. 4.8.3 The economic benefits derived from the quality of water were evaluated in relation to the cost the users are willing to pay in order to benefit from quality water from the Sidi El-Barrak dam, notably the cost of water desalination which was estimated at 2 TD /m3

in a study carried out by SONEDE, the water distribution company. Because the dam water is of good quality, it enables the consumer to make savings equivalent to cost this cost for water consumption. It has also been established within the context of an economic justification study, that when fully operational, the Sidi El Barak will bring about an improvement of the water quality from 1.52 g/l of salt water to 1.37 g/l, with a productivity gain of 1,8 T/ha for the citrus fruits at Cap Bon. Hence, the economic performance of the project in respect of water quality is deemed highly satisfactory. In light of the foregoing, the rate of return corresponding to the improvement of the quality of drinking and the irrigation over 21 690 ha of citrus orchards in Cap Bon stood at 18.15%. 4.8.4 With respect to irrigation, the economic analysis is based on economic prices obtained from conversion product factors and the financial analysis’ agricultural production budgets factors. Economic prices obtained using reference values (tax deductions, interest payment and other transfers) provide a project economic rate of return (ERR) estimated at 18.72% as against 17.79% at appraisal. The economic performance of the project is confirmed and reinforced at completion (cfr Annex 5). 4.8.5 Non-tangible benefits were not quantified ; the method for making their estimates required further and thorough investigations on site and information from services other than the Ministry of Agriculture which were not available within the time allocated to the mission. However, it was noted that these benefits included : improvement of the standard of living, alleviation of the burden of women’s work load who gain time as far as household chores,

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opening up of towns in the project area and the improvement of health conditions of the beneficiary population, etc. 5. SOCIAL AND ENVIRONMENTAL IMPACT 5.1 The social and environmental component of the project was social was executed with a high degree of professionalism on the basis of recommendations made in the Environmental Impact Study (EIS) carried out in 1992. The project followed the directives of the Ministry of Environment, complied with all the relevant Tunisian laws on the subject and took into consideration the recommendations made by the ADB in its social and environmental policy documents. The project performance was excellent. 5.2 Environmental Component : Overall, environmental impacts were controlled by the technical services, contractors awarded the contract for civil engineering works and the technical services of the Beja CRDA. The National Environment Protection Agency (NEPA), took it upon itself to check the conditions in which environmental impacts of the works were taken into consideration as well as the implementation of mitigating measures . Budgets that were forecast were sufficient and the Governorate received assistance from a Japanese project within the framework of the catchments stabilization activities. The periodic reports took this component into account and it was supervised by the ADB on an annual basis. 5.3 The protection of the catchments (600 km²) started in 1957 and preceded the project start-up. Works executed on force account involved the stabilization of 5000 ha of sandy soil, dunes and coastal beaches situated in the catch basin and in the Nefza operations management ; the works reduced the sedimentation of the reservoir which is checked regularly ; 200 ha still have to be afforested but do not constitute any risk of erosion of the dam basin. The project is currently installing a sanitary cordon over 1200 ha intended to stabilize the banks of the reservoir which are prone to erosion and to limit the anthropoid activity. There other works in progress, particularly in private properties : gully correction by vegetation (fruit trees, timber and firewood), correction of dry river beds, laying cribs on unstable slopes (4.000 m3). 5.4 Biodiversity protection and development, filling up of the reservoir over a 4.000 ha surface area has had a significant impact on the region ; a new biotope with a special micro-climate has been installed, creating conditions for the diversification of biodiversity. The reservoir is being colonized by new plants and animal population including aquatic and migratory birds. Part of the site will soon be classified as a nature reserve. In addition to this major achievement, the construction of the Sidi El Barrak dam has made it possible to ensure compensation for approximately 20 millions m3, of losses incurred at Lake Ichkeul, following the construction of dams upstream of the Lake. 5.5 The health aspect of the reservoir is monitored by ONAS and the Department of Public Health ; chemical and bacteriological quality of water is regularly monitored and no eutrophication or pollution was observed. Even though the auto-purification capacity of the reservoir waters is high, a project for the auto-purification the used waters of Nefza town bordering the reservoir is under study ; it will be operational in 2 years and will make it possible to treat 1.500 m3 of urban and industrial effluents per day, which will be damped into the reservoir after tertiary treatment. Measures are also being taken to eradicate water-borne diseases (bilharziosis, dysentery, etc). The Health tests carried out periodically in the Beja laboratories show that currently no particular risk exists. Furthermore, the dam operation will

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contribute to the improvement of salty water by 0.5 g/l at the Sejnane dam level and 0,15 g/l (1.52 to 1.37 g/l) at all the Sidi Salem, Joumine and Sejnane. This represents a significant environmental impact. 5.6 The construction sites have been rehabilitated and given a face lift, thus allowing the integration of the structure in the landscape and ensuring a positive esthetic impact for the sites. 5.7 Social component. : The technical services of the Beja Governorate carried out social measures designed by the National Committee for Expropriation aimed at , in order to ensure the harmonious movement of the 1370 families affected by the expropriation and their compensation for identified damages. To this day, only 130 succession disputes remain unresolved from a total of 4025 cases examined. No dispute required judicial arbitration. Land titles were handed over to all concerned, among whom were women heads of households (a national average of 6%). The real amounts spent on compensation was 10.2 million DT, 230.000 DT representing 3% of cases awaiting approval. All the expropriation measures, movement of people and equipping of relocation sites, land exchange and consolidation, were carried out on the basis of a participatory approach and were subject of official publication. The national Commission and a regional Commission, chaired by the Governor of Béja, ensured the smooth running of all the transactions. 5.8 With regard to combating poverty in the catchments, the project facilitated the opening up of the region, re-assembling families in localities with social amenities ; it got rid of precarious habitat, brought electrification and supply of potable water in the relocation areas, provided guaranteed education, health services, professional training, as well as cultural centers and markets. 4.000 ha of new irrigated areas were organized – including fisheries on the lake reservoir. Programmes dependent on the Fonds de solidarité (Solidarity Fund), so called 26-26 and 21-21 help the poorest people (material donations, livestock, seeds, land, etc), and facilitate access to micro-credit. The Governorate carries out an effective training of farmers and in planning it for fishermen. The Governorate has taken into account an adult education programme intended to reach a rural literacy rate of 80%, as well as the organization of specific programmes for women through artisanal activities linked to diet, tourism, culture and the role of operation managers (60 women targeted). 5.9 Outside the cathment area, water transmission will have important socio-economic repercussions, which at national level will translate into improved citrus production at Cap Bon, supply of drinking water, electricity production, in addition to intangible benefits like the improvement of the quality of life and health, opening up of the region, reduction of the work load for women, improved ecological balance of Lake Ichkeul, etc. The reservoir will also lead to improvements in the biodiversity, because migrant birds could henceforth make it a stop the way to their final destination in the swampy areas, in search of phytoplanctons. The water plan, therefore ensures an ecological balance at the level of the micro-climate for the flora as well as the fauna, and it also facilitates the planning of activities like fisheries and ecological tourism. 5.10 On the basis of the foregoing, the performance of the project , as far as the social and environmental components goes, is considered satisfactory and constitutes a case of best practice in the implementation of measures to reduce the negative impact on the environment.

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6. PROJECT SUSTAINABILITY 6.1 The viability of the project is linked to the sustainability of the results and the benefits accruing from the project, which depend on proper utilization and maintenance of the installations. DGBGTH has a service responsible for the management of the Sidi El Barrak dam within the Directorate of dam management (see section 4.2.2). This service is staffed by personnel recruited from the project implementation team. This staff who have acquired a lot of experience and demonstrated its capacity in the implementation of previous operations, is available. Furthermore, in meetings its commitments in the framework of PDEN, the Tunisian government has demonstrated its financial capacity and the availability of a budget to ensure sustainability of achievements. In accordance with Tunisian laws, the cost of basic infrastructure like dams, water transmission works and basic reservoir development infrastructure road, electric line, settlements, etc, are not recovered from the users (beneficiaries). However, the cost of additional (annex) water distribution infrastructure (irrigation and consumer water) and of electricity supply are recovered through a billing system based on a balance between the production cost and price billed in m3 or by KHz. Thus, the dam water transferred is the property of SOCADENORD which puts its at the disposal of the SONEDE and the CRDA at a single price of 25 thousand m3 (this price also corresponds to the production cost of SOCADENORD). The SONEDE and the CRDA which take over, carries out construction work for water distribution which is billed to users at between 80 and 90 thousand/ m3 , according to the same principle. In addition to recurrent costs for water distribution, the beneficiaries of rural electrification pay 80 to 90 thousand per KHz, as well as the cost of network wiring of approximately 500 DT (payable in 10 years), making the investment in the construction of the mini power station profitable (7.5 millions DT). During its operational phase, the entire project will guarantee a net annual revenue estimated at more than 74 million DT, equivalent to more than 31.4% of the total project cost. The amortization period is set at 40 years for entire investment. 6.2 The hydraulic conditions during the entire existence of the dam will be an important element in the viability of the project. Considering recent development and the fill-up rate of reservoir (88% of the capacity in October 2002 and 31 million m3 already transferred), a normal intramural water regulation can be expected at Side El Bark. On the basis of the above it can be concluded that the project is viable. 7. PERFORMANCE OF THE BANK, BORROWER AND OTHER DONORS 7.1 Performance of the Bank : The performance of the Bank was judged satisfactory. The Bank regularly assisted the DGBGTH ever since the project evaluation and this ensured its completion without any major problem. Seven supervision missions were undertaken during the implementation period, in general 1 per year since 1996, but two (2) were undertaken during 2002. The DGBGTH has however, pointed out some shortcomings in the matters of disbursement, following long delays encountered in the settlement of some payment requests and the irregularity of transmission of disbursement notices by the Bank, which led to disruptions in settlement to firms and made it difficult to follow up disbursements in real time. The detailed analysis (annex 5) shows a satisfaction performance.

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7.2 Performance of the Borrower 7.2.1 The borrower, through a national tender commission, displayed complete neutrality in the awarding of contacts. The management, follow-up control and supervision of contract implementation were carried out efficiently, with the support of independent external firms. The borrower also showed professionalism in the commissioning of works and ensured the execution of contracts in line with existing regulations. The borrower fulfilled his obligations satisfactorily, in spite of a lapse of 15 and 7 months, respectively, between the evaluation and negotiations and between project approval by the Board of Governors and the signature of the loan agreement. They also met the conditions precedent to first disbursement, although there was a significant delay of 8 months after the signature of the loan agreement. Its contribution to the funding of the project was regularly provided. However, the contract awarding procedure should be more flexible in order to increase efficiency and reduce delays. 7.2.2 Annual audits of the financial and accounting management were regularly carried out. They established that the project possessed an accounting and financial system able to guarantee good management of the project. However, it was noted that the audit missions did not present succinct and detailed reports, and rarely made any recommendations. The reports reiterated the delays in disbursements and contract awarding, but were still silent on the recommendations that would have made it possible to improve these dysfunctional situations. The absence of directives from the Bank on audit matters, contributed to reducing the effectiveness of the audits by making DGBGTH limit the audit missions to expenses made on the loan resources in accordance with general conditions. The audit of the 2001 exercise was late by 4 months.. 7.3 Performance of the Executing Agency

7.3.1 The DGBGTH completed the project in a satisfactory manner, particularly at the technical and financial level. The technical components were carried out successfully within acceptable time limits, considering the complexity of the implementation tasks (the Side El Barrack dam with a capacity 264 millions m3, is the biggest dam in Tunisia, after Side Salem, 450 million m3 . At the accounting and financial level, the resources were managed according to the mechanisms put in place by the government and in accordance with the Bank’s provisions. The project was carried out within the limits of available funds and some reductions were made progressively as savings were made. The accounts were audited on an annual basis and the audit reports submitted to the Bank on time, according to the Bank’s directives. Therefore, the DGBGTH run this project with professionalism and timeliness, relying on its internal human capacity whose experience, accumulated with the construction of the Side Salem, Salina, Jasmine, Barbara, etc. Gives this department (Direction) a good reputation in this field and guarantees continuity of achievements. 7.3.2 Nevertheless, the following shortcomings should be corrected : (i) the project manager and the staff of the executing agency have unduly heavy tasks and the standard of the equipment is too modest (positions like accountant and deputy project manager were not provided for ; (ii) accounting and financial information (expenses by component, expenses in foreign currency and in local currency, taxes, customs duties physical and financial contingencies, management of disbursements and financings in foreign exchange, etc.) are not sufficiently handled for an efficient follow up and for supervision and evaluation in the best conditions ; (iii) separate audit in local currency, not financed by the Bank, was not

16

carried out ; (iv) the 2001 audit report was not available at the time of the mission, whereas it should have been submitted to the Bank at the latest six months after the completion of the exercise (delay of 4 months) ; and (v) the time-delay for contract awarding procedure and the final settlement of works could better be reduced while applying the requirements of the internal procedures for public contacts in Tunisia and in accordance with the conditions of the Bank. 7.3.3 On the whole, the objectives of the project as defined at appraisal were met, in some cases exceeded, and the general conditions, including those specified in the loan agreement, were regularly met. Consequently, the performance of the executing agency was judged satisfactory, particularly the filling up of the dam within the specified time. 7.4 Performance of other Donors The other donors regularly and without delay disbursed their parts in the co-financing. The BIOBANKA which joined the financing plan in the course of the project implementation, met the expectations of the borrower. In addition, the construction of the dam, the financing to which the Bank did not participate, was completed within the set time frame. On the basis of these major results, the performance of the other donors is judged satisfactory. 8. OVERALL PERFORMANCE AND ASSESSMENT All the installations planned within the framework of the project were achieved satisfactorily. They are all now operational and the industrial pumping trial period made it possible to pump 31 million m3 without any significant problem, with good performance by the entire works. All the installed infrastructure will very likely be utilized and maintained according to the rules, considering DGBGTH’s experience. The objectives expected from the project in terms of irrigation have been achieved, particularly the creation of 7000 ha as well as the maintenance and improvement of the irrigation of 21,690 ha in the Cap Bon. The provision of drinking water concerns the project area, Grand Tunis, Sousse and Sfax. Water quality analyses indicated a level of salinity of 0.5 g/l only. The totality of these elements give indications in effect for the improvement of conditions and standards of living of the populations of Cap Bon. The project overall performance is considered satisfactory with an average rating of .325 out of 4 as can be seen in Annex 5. 9. CONCLUSIONS, LESSONS LEARNT AND RECOMMENDATIONS 9.1 Conclusions 9.1.1 The West Sidi El Barrak irrigation development project which started in 1994, has been fully completed, but with a 44 months slippage on the implementation schedule at appraisal. This delay was due to two main reasons. On one hand, it took a long period for loan disbursement to become effective (14 months), which was due on one hand, to the difficulties the borrower encountered in closing the financing arrangements, and on the other, because the timetable projected during the appraisal was too optimistic and there were problems in the technical execution of some works, particularly in the piping and electrical wiring of the pump station. It should be noted, however, that the Bank’s appraisal report did not provide for a time limit for effectiveness whereas the Bank gives a maximum of one year with effect from the date of approval of the loan. On the other hand, the performance of the

17

group responsible for the implementation of transfer structures proved to be average in terms of time limit. It is important to note, however, that the delays mentioned above did not have any negative impact on the results obtained by this project, except for potential profit lost as a result of the delayed mobilization of 264 million m3 annually. 9.1.2 The management of the project was well carried out from the technical and financial viewpoints. Nevertheless, problems identified concerning contracts, audits and disbursements should be resolved by reducing delays and the time for approval of contracts, as well as the final settlement of contracts. 9.1.3 Overall, this project contributes to the improvement of the environment and living conditions of the people, particularly for rural women, by reducing their burden of their work through the provision of drinking water. Its complementarity with other regional projects, several of them financed by the Bank within the PDEN framework has made it possible to fully exploit the spillover effect of access to good quality water for drinking and irrigation. Its social impact and socio-economic benefits are conducive to the stability of populations and agricultural production in Cap Bon, as well as to the creation of income-generating activities. The Bank’s support to the financing of this project contributed to its success and to the implementation of PDEN in general. 9.2 Lessons Learnt 9.2.1 Lessons that can be learnt from this project concern the fundamental prerequisite for success of projects, which are : existence of adequate institutional framework, good project design, the quality of appraisal and implementation as well as adherence to the project objectives by the concerned parties. Concerning the institutional framework, as mentioned earlier, Tunisia has made the rational management of water resources its priority and has set up institutional framework within its administration, which makes it possible for systematic follow-up of the technical implementation of irrigation scheme project, as well as financial management with an accounting and financial management mechanism which is well controlled by the central services and decentralized agencies. This framework is regularly assessed and reorganized in order to adapt it to field requirements. Thus the DGB was reorganized into the DGBGTH. As regards projects design, it was noted that the project falls within the scope of the IXth Economic and Social Development Plan and more specifically of the PDEN. The project objectives were, therefore, formulated on a realistic basis based on global sectoral objectives of the programmes. The result is a better project design oriented to concrete results in the field. Furthermore, the project benefited from an appropriate (assessment which made it possible to have an optimum definition of technical interventions for the project and to put in place a financial package within the limits of the necessary resources. Proper implementation was made possible by the availability of human resources in sufficient numbers and a very active private sector. Finally, all the parties to the project (the government, the people within the dam catchments area, the people who hosted the resettlers, etc.) adhered to the project objectives by implementing the resettlement plan using a participatory approach, including participatory analysis of problems/needs, prioritization of needs, determination of compensation and other accompanying measures (land, cash, education and health infrastructure, etc.) and the implementation of the resettlement project.

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9.2.2 The social impact of the project was considered positive in view of the satisfaction of the resettled populations (1370 families) and the employment generated in the agricultural sector. The project is in accordance with the Bank’s vision for poverty reduction. Rural electrification will bring added-value of 1.65 million DT per year and will benefit a population of 33 300 people. 9.3 Recommendations 9.3.1 Recommendations to the borrower : Considering the heavy work load (section 7.3.1) all heads of projects similar to that of the Sidi El Barrak dam construction project should be supported by 1 engineer for the supervision of construction work, and 1 engineer for follow-up of planning, staffing arrangements, managements costs control and other administrative tasks. In addition, the borrower should identify project activities aimed at training in utilization and management of irrigation and consumption, as well as capacity building in the maintenance and management of irrigation infrastructure and potable water transportation channels. It is also recommended that the borrower intensify activities to protect the catchment basin against erosion which could lead to excessive run off of solid and dissolved materials to the dam, in order to safeguard the quality of the water and the useful capacity of the dam. 9.3.2 Recommendations to the Bank : The Bank should systematically organize annual financial supervision by the department responsible for disbursement, in order to facilitate the project implementation and solve all existing financing-related problems (section 7.1.1). Furthermore, it is advisable that the contract settlement procedures are improved in order to facilitate payment within the shorter periods than those that were observed during the implementation of this project. Such a procedure could involve the Bank’s Project Officer through information, in order to enable him to ensure the monitoring by giving assistance when necessary. Furthermore, the Bank could make arrangements that would allow the borrower to look up on the internet, the disbursement status of projects being implemented, as is the case with project financed by the World Bank.

ANNEXES

ANNEX II

IMPLEMENTATION PERFORMANCE OF ADB-FINANCED CONTRACTS

Reference SUBJECT OF CONTRACT CONTRACTOR Date of Signature

Amount (TD)

Bank’s share (TD)

Start-up Estimated Duration (months)

Actual (months)

Slippage In

duration (%)

Package III-1 Execution of water works intake EAM III-1 3- Aug--96 9 691 068 6 864 674 21-Aug-96 26 48 -22

Package III-2 Pipe and Canal EAM III-2 22-April-96 9 810 937 7 087 179 13-May-96 36 67 -31

Package III-3 Supply and assembly of pumping station equipment EMIT 20-Nov-95 4 546 760 3 124 057 11-July-97 26 48 -22

Package III-5 Supply of hydro mechanical pipeline equipment OTC 30-Nov-00 183 664 123 984 4-jDec-00 8 6 2

Package II A Depression of GP7 road and feeder roads G S-STAM 18-Julyl-95 16 176 027 11 425 027 15-Sept-95 42 51 -9

Package IV Acquisition 02 TT vehicles SOTRADIES 23-Aug-96 77 796 38 570 6 5 1 Package IV Purchase of POLO vehicles ENNAKL 78 695 60 535 6 4 2 Package IV Purchase of C15 vehicles CITROEN 20-Avril-95 112 948 87 092 6 4 2

ANNEX III 1 of 1

ESTIMATED AND ACTUAL COSTS/PROJECTED AND ACTUAL FINANCING

Actual Project Costs by Component (in UA millions)

Estimated Costs at Appraisal Costs on Completion COMPONENTS F.E. L.C. Total F.E. L.C. Total Gap (%)

A. Dam Construction 49.79 08.07 58.49 45.10 13.39 58.49 0.0 B. Construction of reservoir 25.67 05.08 30.75 07.49 03.14 10.63 -65 C. Transfer Structures 22.20 05.69 27.89 15.43 09.86 25.28 -9 D. Inspection and Supervision 05.30 02.60 07.90 0.17 12.62 12.79 62 E. Implementation Unit 04.02 13.44 17.46 0.05 06.50 06.55 -63 Total Base Cost 106.98 35.51 142.49 68.24 45.51 113.74 -20 Physical contingencies 10.47 03.55 14.25 07.14 04.76 11.90 Financial Contingencies 11.61 06.65 18.26 03.97 02.65 06.61

TOTAL PROJECT 129.29 45.71 175.00 79.34 52.92 132.26 -24

EXCHANGE RATE 1.3775 1.3775 1.3775 1.7791 1.7791 1.7791 TOTAL (in million TD) 178.10 62.96 241.06 141.16 94.14 235.30 -2.39

• All costs are expressed tax and duty-free • The exchange rate on completion corresponds with the average (TD/UA 1.791).

Table 3.3 Comparative table of project costs by source of finance

(in UA millions)

Estimated costs at Appraisal Costs on Completion SOURCES OF FINANCE F.E. L.C. Total F.E. L.C. Total Gap (%)

A. ADB 54.20 54.20 21.00 21.00 -61.25 B. AFESD 36.37 10.92 47.29 33.73 33.73 -28.68 C. BIOBANKA 24.56 24.56 100 D. Government 38.72 34.79 73.51 - 52.92 52.92 -28.01

TOTAL 129.29 45.71 175.00 79.29 52.92 132.21 -24.45 % due Coot Total 73.88 26.12 100.00 59.97 40.03 100.00

• All costs are expressed tax and duty-free

ANNEX IV 1 of 1

ANNUAL DISBURSEMENTS : ADB FUNDS AND OVERALL PROJECT

Annual Disbursement of ADB Financing (in UA millions)

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Total

Estimated 8.96 15.59 13.59 12.41 3.65 54.20 Actual 0.00 0.00 1.30 2.25 4.33 3.98 2.34 2.03 0.98 3.79 21.00 % Disbursed 0.00 0.00 6.19 16.90 37.52 56.48 67.62 77.29 81.95 100

Annual Disbursement for the Entire Project (en UA million)

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Total

Est. 12.51 40.54 42.47 41.00 29.66 8.82 175.00 Actual 0.0 6.88 11.92 24.23 23.33 16.72 14.73 7.53 22.10 0.98 3.79 95.17

% Dis. 0.0 5.21 14.22 32.55 50.19 62.84 73.98 79.68 96.39 97.13 100 • All costs are expressed tax and duty-free

ANNEX V 1 of 3

CALCULATION OF THE ECONOMIC AND FINANCIAL RATES OF RETURN Assumptions for the Calculation of the IRR and the ERR The calculation of the economic and financial impact indicators, Cash Flows, Cost/Benefit ratio, the Net Present Value (NPV), the Internal Rate of Return (IRR) and the Economic Rate of Return (ERR), was carried out on the basis of the following assumptions :

• Assessment of investment impact made up of the project cost corresponding to the indirect cost of irrigation, at pro-rata of water pumped for irrigation (62 million m3 for irrigation), and at the hectare ;

• The other costs made up of the cost of connection to the irrigation system, corresponding to 500 TD per holding, the cost of utilization of irrigation water and the maintenance of infrastructure, equivalent to 90 thousand per m3, with between 4,300 and 5,570 of m3 per hectare and per year, representing between 96 and 124 DT/ha ;

• The size of the standard farm measured 2.5 hectares, with 2 types of cultivation (citrus growing at Ouchtata and Cap Bon, and vegetables/grains/livestock at Nefza and Sejnane - cfr « Data on Irrigation » in Annex 10) ;

• The financial and economic prices were obtained on site and can be consulted on Page 2 of the present annex;

• Technical data on farming with respect to cultivated farm crops to be promoted (grain crops, legumes, tree cultivation, fodder cropping) and to livestock (dairy farming, cattle breeding, and sheep raising) were obtained on site ;

Methodology for the Calculation of the IRR and the ERR The methodology used is the one of cost/benefit analysis for the IRR and the TRE, and the method of reference prices for the ERR. The analysis methodology is made up of the following steps :

• Establishment of the price list and price classification by nature of product ; • Preparation of matrices of crop cultures made up of yields and technical norms for

the utilization of inputs, including labor ; • Separation of production matrices on the types of farming (3 types in this

model) ; • The financial data for the various types of cultures is introduced with spatial

repartition (occupations on the soil) ; this involves permanent labor or family labor, production consumption, investment at the farming level, land rental, etc. ;

• The financial and economic data are automatically generated by the software (Farmod).

Results of the analysis At the price level : most of the financial prices do not differ from economic prices, except for basic consumer goods such as cereals which are subject of protection : consumer prices are lower than economic prices or reference prices. In the same way fertilizers have economic prices higher than producer prices. Used to valorize productions and

ANNEX V 2 of 3

factors of production on the basis of the methodology described above, the following results were obtained : IRR Computation : the internal rate of return at the project level stands at 14.21 %. This is due not only to the fact that activities under the project are profitable for the farmers, but also the capital investment in the selected farms is highly valorized, given that the IRR is higher than the opportunity cost of capital (OCC) which stands at 12 %. This is further confirmed by the cost-benefit ratio which is greater than 1 for all the farming models. Computation of the ERR : the ERR for the project stands at 18.72 %, which is a higher than estimated at appraisal by the Bank, or 17.97%. The fact that the ERR is positive shows that the project is economically viable ; the fact that it is lower than IRR shows that the activities to be developed generate more wealth to the economy than the beneficiaries receive in net income over the entire income-generating activities (IGA). Indeed, operators entrusted with marketing the 264 million m3 of regular water generate between 25 thousand per m3 (SOCADENORD) and 90 thousand per m3 (SONEDE), given that one m3 can be valued at more than 500 thousand in Tunisia. Consequently, the Tunisian Government subsidy to the rural sector of the project leads to a ERR higher than the IRR. The ERR being higher than OCC shows that the Government makes efficient use of its capital by investing in the project. Furthermore, the project is stable as seen from the sensitivity analysis which shows that with the fall in revenue by 10 %, the ERR remains at the level of 18.41 %. When the fall in revenue reaches 15%, the ERR is constant at 18.29%. the ERR is nil when revenues fall by 56.92 %.

Matrix of Prices applied (in Tunisian Dinar)

Products Units Financial Prices Economic Prices Output Public Utilities Resources Water Mm/m3 90 500 Electricity Mm/m3 80 270 Cereal Products Hard wheat TD/Q 260 210 Common Wheat TD/Q 220 210 Column structure TD/Q 280 220 Garden Crops Tomatoes Mm/kg 400 380 Green Pepper Mm/kg 800 760 Onion Mm/kg 200 200 Carrots Mm/kg 600 600 Zucchini Mm/kg 500 500 Potatoes Mm/kg 600 550 Cucumber Mm/kg 600 390 Beans Mm/kg 1000 980 Green Beans Mm/kg 980 900 Pepper Mm/kg 500 300 Lettuce Mm/kg 350 350 Citrus fruits Maltase Mm/kg 250 250 Orange Mm/kg 240 240 Mandarin Mm/kg 220 250 Clementine Mm/kg 400 380 Lemon Mm/kg 320 400 Various Fruits Grenadilla Mm/kg 500 650 Pear Mm/kg 800 800

ANNEX V 3 of 3

Products Units Financial Prices Economic Prices Apple Mm/kg 980 980 Dates Mm/kg 1200 1200 Stable goods Tobacco TD/kg 120 95 Olive Mm/kg 1600 1200 Raisin Mm/kg 1500 1100 Livestock products Chicken TD/kg 1 1 Sheep TD/kg 4 4 Goat TD/kg 3 3 Beef TD/kg 3 3 Cow’s milk Mm/litre 360 320 Sheep’s milk Mm/litre 365 320 Goat’s milk Mm/litre 400 320 Wool TD/kg 1,7 1,5 Manure TD/T 60 100 Fodder products Hay TD/T 80 120 Wheat straw TD/T 20 35 Various fodder crops TD/T 15 20 Input grain cereals Mm/kg 480 400 Phosphate 45 Mm/kg 220 282 Ammonite Mm/kg 210 186 Herbicides Mm/kg 145 155 Pesticides Mm/kg 135 120 Provision of tractor TD/hrs 12 12 Provision of harvesters TD/hrs 40 40 Provision of smashers TD/hrs 15 15 Baling Mm/Unit 750 750 Veterinary Products Fixed price Fixed price Fixed price Concentrate foodstuff Fixed price Fixed price Fixed price Crop storage facility Fixed price Fixed price Fixed price Sheep pen Fixed price Fixed price Fixed price Animal housing facility Fixed price Fixed price Fixed price Implement Fixed price Fixed price Fixed price Irrigation network connection Mm/unit 500 1100 Unskilled labor TD/P/d 5 4 Skilled labor TD/P/d 10.5 12.6 Labor in January TD/P/d 5 4 Labor in February TD/P/d 5 4 Labor in March TD/P/d 5.5 4.4 Labor in April TD/P/d 7 5.6 Labor in May TD/P/d 7 5.6 Labor in June TD/P/d 10.5 8.4 Labor in July TD/P/d 10.5 8.4 Labor in August TD/P/d 8 6.4 Labor in September TD/P/d 7.5 6 Labor in October TD/P/d 7 5.6 Labor in November TD/P/d 7 5.6 Labor in December TD/P/d

ANNEX VI 1 of 3

TUNISIA SIDI EL BARAK DAM CONSTRUCTION PROJECT

Performance Evaluation and Rating

Implementation Performance

Component Indicators Score (1 to 4)

Remarks

1. Adherence to Time Schedule 2 The project was completed with a four-month and ten months delay corresponding to 181% of the initial schedule. It should be noted however, that the initial schedule had not taken into account the implementation duration which accounted for 25 months.

2. Adherence to Cost Schedule 4 The total project cost on completion calculated in Tunisian Dinars is only lower by nearly 12.68% than the cost estimate at appraisal.

3. Compliance with Covenants 3 All loan and conditions were fulfilled. However, the audit was limited to expenditure incurred from loan resources. Bank procurement were strictly followed and complied with.

4. Adequacy of Monitoring, Evaluation and Reporting

3 The technical management of the project is deemed satisfactory. Progress reports on the project and audit of expenditure incurred from loan resources were regularly submitted to the Bank.

5. Satisfactory Operations 4 The engineering works carried out under the project were put into service as soon as they were completed. DGBGTH which is the dam’s operator has the requisite human, logistic and material means to run the dam in conformity with the standards and trade practices.

Total 16 Overall Assessment of Implementation Performance

3.2 The project implementation is satisfactory.

Bank Performance Component Indicators Rating

(1 to 4) Remarks

1. At identification 4 This project was an integral part of the priorities set in PDEN and the Bank made every effort to ensure that a very good feasibility study was done

2. At preparation of project 3 The feasibility study which was very detailed and of very good quality was used as a reference document and made it possible to envisage project appraisal in mid-1992. The project was subsequently approved in mid-1994.

3. At appraisal 3 The appraisal report is of good quality. It examined all technical, economic, financial and social and environmental aspects connected with that type of project. However, it is too optimistic in the estimated project implementation schedule. .

4. At supervision 3 7 supervision missions were carried out but no financial supervision took place. The missions made it possible to promptly solve problems which would have delayed the project’s implementation. Nonetheless, weaknesses were observed in respect of disbursements.

ANNEX VI 2 of 3

Total 13 Overall assessment of Bank Performance 3.25 Satisfactory

Project Outcome

Component Indicators Score

(1 to 4) Remarks

1. Relevance and Achievement of Objectives

i) Macro-economic Policy 4 The project contributes to socio-economic development and to the achievement of the poverty reduction objective

ii) Sector Policy 4 The project contributes significantly to the development of the agricultural sector and to meeting the demand for drinking water in the rural area.

iii) Physical (incl. Production) 4 The project has been completed and its capital works achieved and exceeded the objectives.

iv) Financial 3 The final project cost in Tunisian Dinars is only 2.39% lower than the estimate at appraisal. However, financial management should be improved.

v) Poverty Reduction & Social & Gender 4 The project has a very positive impact on poverty reduction and on the social conditions of the population , especially those of women.

vi) Environment 3 The negative impact of the project on the environment have been and are still being mitigated. Appropriate mitigating measures were taken during the works.

vii) Private Sector Development 3,5 The project provided jobs for many people for nearly eight years, and it promoted the development of irrigated farming.

2. Institutional Building i) Institutional Framework 4 The project did not have a specific institutional

building objective. On the other hand, for its implementation, it was in keeping with the regional development project coordination system that was put in place at the national and governorates levels.

ii) Integrated Financial and Management Systems including Audit Systems

2.5 The Borrower kept separate project accounts but audits were only carried out for expenditure made from loan resources

iii) Transfer of Technology 4 DGBGTH’s experience in studies and project management of this type of project was enhanced.

iv) Staffing by qualified persons (incl. rotation) training and counterpart staff

2 Staffing by qualified staff was adequate for studies, procurement and project management

ANNEX VI 3 of 3

3. Sustainability i) Continued Borrower Commitment 4 The Borrower, assumed the responsibility for social

development by taking charge of the loan and part of expenses in local currency as well as the debt service.

ii) Environmental Policy 3 The existing legal framework, in its application, should make it possible to protect the environment.

iii) Institutional Framework 4 The project fits in with the current organization of DGBGTH.

iv) Technical Viability and Staffing 3 DGBGTH has technical staff , logistic means and financial resources to ensure the operation and maintenance of installations in conformity with the standards..

v) Financial Viability including cost recovery systems

3 Capital costs are not recovered from the beneficiaries.

vi) Economic Viability 4 As a result of its economic spillovers in the agricultural and public health areas, the project is national development factor.

vii) Environmental Viability 3 The infrastructures put in place are not likely to affect local environment protection strategies.

viii) Continuity in operation and maintenance (availability of recurrent funding, foreign exchange , spare parts, etc.)

3 The dam is part of an existing site/park whose operation and maintenance are regularly maintained by DGBGTH. The latter is in a position to carry out these activities provided that it has sufficient financial resources. Consequently, in future, DGBGTH’s budget allocation should be adequate.

4. Economic Internal Rate of Return 3.5 The internal rate of return of the project on completion is 18.72%. The positive economic consequences of the project are thus confirmed on completion.

TOTAL 68.5 Overall assessment of outcome 3.4 The overall assessment of the project is satisfactory

.

ANNEX VII 1 of 2

RECOMMENDATIONS AND FOLLOW –UP MATRIX

Main Findings and Recommendations

Lessons learnt Recommendation and Responsibility

Project Formulation • Project Rationale The Government has a strategy,

, the PDEN The Government should ensure that PDEN is completed and that development actions PDEN are taken.

• Project Preparation The Government took the initiative to prepare the project.

Future actions should be carried out that way.

• Appraisal The Bank evaluated the Government’s proposals.

Idem

• Implementation There was a three-year and eight months delay owing to the programming which was too optimistic

Examine all the cross-cutting issues to avoid delays which change the basic data of the appraisal.

Technical performance • Technical project output All the engineering works of the

project were carried out satisfactorily but with delays.

Take advantage of the lessons leant from the current project to gain time in future projects.

Financial performance • Project Cost Was reduced compared to the

appraisal estimate. Create a good data base based on the lessons learnt from the project and to enhance effectiveness if future operations.

• Financial Management Although the financial management was considered in conformity with a transparent management mechanism, it does not make it possible to have a working table of the implementation of expenses in local currency and in foreign exchange (UA) duty-free and duty-paid amounts , contract amounts by source of finance and foreign exchange, local currency and taxes.

The project implementation unit should keep a clear performance chart of all operations by source of finance, in foreign exchange and in local currency, as well duty-free and duty-paid amounts. The Bank should include taxes in the data of its appraisal for better control. .

• Annual Audits of the project The Audits are too summarized and do not include recommendations.

The Bank should provide the Borrower with clear terms of reference of missions and audit reports

• Disbursement The project billing is very satisfactory ; however, the borrower complained about long payment delays owing to the Bank

Improve the time taken by the Bank to respond to the Borrower’s requests. Involve the project officer in the payment process.

ANNEX VII 2 of 2

Sustainability • Valorize and sustain the

project ‘s achievements The project’s achievement are valorized by putting in place water supply and irrigation infrastructures.

In addition to the ongoing activities, the Government must identify project actions the would ensure the sustainability of achievements though water management training and capacity building in the maintenance of infrastructure.

General Measures • How to capitalize the

achievements The project was implemented satisfactorily and important lessons were learnt that will serve in future operations.

Capitalize the achievements in terms of formulation, implementation and project management to build up the expertise acquired from the Sidi El Barrak Project.

ANNEX VIII 1 of 1

Sources of Informations

SOURCES OF INFORMATION

TYPE OF INFORMATION SOURCES Technical Works • Status of Work Report of the Project Implementation Unit Finding from field and working sessions of the

project completion mission • General Data Report of the Project Implementation Unit Findings from field and working sessions of the

project completion mission Financial Data • Trend of Project The Bank’s Appraisal Report and Report of the

Project Implementation Unit • List of contracts Report of the project Implementation Unit Bank’s Disbursement Report • Disbursements Bank’s Disbursement Report • Audits Borrower’s audit report Economic and Financial Analysis • Prices Findings from field visits and working sessions

of the project completion mission • Technical operating data Findings from field visits and working sessions

of the project completion mission Bank’s Appraisal Report • Irrigation Data Findings from field visits and working sessions

of the project completion mission Social and Environmental Impact Findings from field visits and working sessions

of the project completion mission Bank’s Appraisal Report

ANNEX IX 1 of 1

Observations de l’Emprunteur et de l’Organe d’Exécution

OBSERVATIONS OF THE BORROWER AND THE EXECUTING AGENCY

At the end of the field mission, all conclusions of the mission were recorded in a memorandum which was read and approved by the Project Executing Agency and the Borrower (ref. to signed memorandum).

ANNEX X 1 of 2

GENERAL TECHNICAL AND FINANCIAL DATA

Dams and Appliances HYDROLOGY DAM SPILLWAY BOTTOM

EMPTYING Type Earth

embankment Surface of

the river basin

865 Km2 Foundation Alluvial soil

Maximum depth

28 m

Maximum water flow

of site

168 m3/s

Annual average

influx

265 million m3

Littoral of the crest

30 m

Type Lateral with polygonal weir energy and dissipater

Probable maximum

flood

3000 m3/s

Length of crest

595 m

Pump out water flow

rate

110 m3/s

Normal dam level

27 m

Upstream side

8 m

Maximum evacuator

2.553 m3/s

Slope 1/3, 1/15, 1/7

Pump out speed

0,4 m/j Total

volume of the dam

264,5 million de m3

Downstream side slop

1/2,5, 1/15, 1/9

Water flow length of overflow

front

575 m

Volume of embankment

3 million of m3

Controlled volume of

the dam

264,5 million m3

Tightness Plastic casing

Charge maxi. in

watershed

2 m

Length of gallery

302 m

Construction of the reservoir

DIVERSION OF GP + ROAD PISTES POWER TRANSMISSION LINE

Length 7,1 km Length 23 km Source distance

36 km Overpasses and bridges

Oueds Maleh and Bouzenna

2 bridges

Over respective of bridges

168 m et 68 m

Width of dykes/causeways

7,5 m Voltage 90 kv

• The Sidi El Barrak Dam Construction project consisted in transferring water from the dam into the Seyjane dam. The volume

exploited each year will be 265 million m3 and should provide irrigation of the • The Sidi El Barrak Construction Project consisted in transferring dam water into the Sejnane dam. The volume exploited annually

will be 265 million of m3 and should make it possible the irrigation of citrus fruits, vegetable and dairy farms, the supply of drinking water and production of electricity in rural areas at Nefza, Sejane and Cap Bon. Furthermore, the water transferred will increase the crop yields and to generate economic benefits in terms of drinking water estimated at the equivalent of the 1.5 to 1.7 g/l of the cost of water desalinization

Transfer of water from Sidi El Barrak

PUMPING STATION PIPE CANAL Capacity 8,74 m3/s Diameter 1.800 mm Depth 6 km

Charge 121 m Length 18,4 km Type Open pit

Geographical data Governorate Oued Basin

(km2) Water input

(million of m3) Beja Zouaraa 900 265

ANNEX 10 2 of 2

Données Générales

BASIC IRRIGATION DATA

TOWN North-Eastern Region Nefza Ouchtata Sejnane Mateur Cap Bon VARIABLES New plots Existing

plots New plots Existing

plots New Plots Existing

plots New plots Existing

plots New plots Existing

plot Area (ha) 2.530 0 470 0 4.009 0 0 1.643 0 20.050

Types of forms Vegetables feed-grains-Livestock Citrus growing Vegetables feed-grains-

Livestock Citrus growing

Number of farms (nb) 1.012 0 188 0 1.604 0 0 657 0 8.020 Average farm (ha) 2,5 2,5 2,5 2,5 2,5 2,5 2,5 2,5 2,5 2,5 Number of persons per family (nb) 5 5 5 5 5 5 5 5 5 5

Water requirements (m3/ha)

4.304 0 5.568 0 4.304 0 0 1.856 0 1.392

Water requirements in T (m3)

10.889.120 0 2.616.960 0 17.254.736 0 0 3.049.408 0 27.909.600

Beneficiary population 5.060 940 8.018 3.286 40.100 N.B. :

• The cost of connecting farmers to the irrigation system was estimated by the government at TD 500 per user, payable in 10 years • Water requirements in the dam’s catchment : 33,810,224 m3 • Water requirements in the Cap Bon : 27,909,600 m3 • Water required for irrigation: 61,719,824 m3 • Total population beneficiary from irrigation : 57.404